Eagle Bulk Shipping has announced the acquisition of two Ultramax bulkcarriers, which have SDARI-64 scrubber-fitted specifications. While the first carrier, built in 2015, was acquired for $16.5 million; the other vessel, built in 2016, was purchased for $17.65 million.
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Eagle Bulk (EGLE) said that the 2015-built vessel will be renamed as the M/V Helsinki Eagle and the 2016-built will be renamed as the M/V Stockholm Eagle. The shipping company said that both the ships were constructed at Chengxi Shipyard Co. Ltd.
“We have continued to actively renew our fleet this past year, acquiring three modern/efficient scrubber-fitted Ultramaxes and divesting five of our vintage Supramaxes, with an average age of ~18 years,” Eagle Bulk’s CEO Gary Vogel said. “These transactions have vastly improved our fleet makeup—increasing the average size of our ships, improving our fleet age profile, and reducing our emissions footprint on a per deadweight-ton basis.”
Vogel further said that, “We believe that our fleet renewal strategy along with our active management approach to trading will help us maximize our cash generation potential and continue to deliver on our market outperformance.” (See EGLE stock analysis on TipRanks)
On Dec. 24, Noble Financial analyst Poe Fratt lowered the stock’s price target to $30 (63.9% upside potential) from $32.50 following a recent equity offering.
Meanwhile, the analyst maintained a Buy rating citing the stock’s compelling risk/reward profile.
“EGLE continues to build a strong track record of TCE [Time charter equivalent] rate outperformance and solid execution on the fleet renewal program,” Fratt wrote in a note to investors. “The fleet profile improves and scrubbers help position the Ultramar/Supramax fleet to benefit if/when fuel spreads recover.”
From the rest of the Street, the stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 2 unanimous Buys. The average analyst price target of $24 implies upside potential of about 31.2% to current levels. That’s after shares plummeted 43.2% on a year-to-date basis.
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